Stocks close higher after strong Goldman, Netflix earnings

AnoraMahmudova

U.S. stocks closed higher Tuesday as investors welcomed stronger-than-expected quarterly results from a roster of companies, including Goldman Sachs Group Inc., UnitedHealth Group Inc. and Netflix Inc.

Meanwhile, reports on inflation and home-builder confidence that were in line with forecasts underlined market expectations that the Federal Reserve is likely to raise interest rates in December.

The S&P 500 index
SPX, +1.32%
finished up 13.10 points, or 0.6%, at 2,139.60, with all 11 main sectors trading higher. The health-care, materials and utilities sectors led gainers.

A series of whipsaw trading days that saw stocks open with big moves only to lose momentum toward the end of the session had some market participants skeptical about the staying power of Tuesday’s climb.

“The next few weeks are historically very difficult for the market that is already grappling with a lot of uncertainty. And at these valuations, markets would like to hear a lot more positive news to go higher,” said Quincy Krosby, market strategist at Prudential Financial.

Strong earnings reports and a European rally set up strength in stocks on a relatively light volume session Tuesday, said Mark Kepner, managing director of sales and trading at Themis Trading.

“The focus here is earnings over the next couple of weeks, but out of the corner of your eye you have to watch the dollar and interest rates,” Kepner said. Both the dollar and U.S. Treasury yields have surged in October, and that’s contributed to a lot of shakiness in the stock market, more so than uncertainty about the election, he said.

That said, the U.S. presidential contest between Democratic nominee Hillary Clinton and Republican contender Donald Trump, with voting set to take place on Nov. 8, has been cited in much of the sideways trading over the past several weeks as investors attempt to weigh how the outcome could influence stocks.

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